Trade Unions in Norway

The Norwegian labour movement, typically Nordic in nature, consists of nationwide trade unions primarily organised by industry and occupation. Most unions are affiliated to one of four union confederations. The union density rat` is high in an international context, although lower than in the rest of the Nordic countries. Wage bargaining is a crucial task for trade unions, but the labour market parties are also involved in bi- and tripartite cooperation on various issues . Norway has a single-channel system for employee representation, where trade unions, not work councils established though legislation, represent employees at workplace level. Most trade unions have workplace union branches and shop stewards elected by and among the unionised employees. These play a significant role in local wage negotiations and employee co-determination at company level .

Initially established in the late 19th century, early Norwegian trade unions comprised workers from the industry, craftsmanship, and mining sectors. These were followed by nationwide trade unions that came together in 1899 to form the Norwegian Confederation of Trade Unions, LO. The labour movement gradually expanded as new groups of workers organised themselves, both within and outside LO.

As of 2023, there are approximately 85 nationwide trade unions in Norway. In the private sector, blue-collar and white-collar workers are typically organised into their respective trade unions. In the public sector some unions aim to organise all employees, whereas others organise certain professions. Most Norwegian trade unions are affiliated with one of the four peak confederations. LO ("Landsorganisasjonen i Norge", l’Organisation nationale de Norvège) is the largest of Norway’s four peak confederations, consisting of 24 nationwide trade unions. The LO unions organise employees in most parts of the labour market, but a majority of their members are employed in positions that do not require higher education. Unions outside LO are, with few exceptions, organised into three confederations that, to some extent, compete with LO, but also amongst themselves. Unio is the second-largest confederation and represents, among others, unions for teachers and registered nurses. Akademikerne is a confederation that gathers organisations for professional employees with higher education (such as doctors, lawyers, engineers, and others), while YS organises many of the same groups as LO.

Norwegian trade unions are not organised along political or religious lines. LO has historically had strong ties to the Labour Party, and this is still the case although the link is not as tight as it used to be. This is partly due to changes in the labour market and consequent changes to the organisational landscape of trade unions. Whereas LO and the LO unions had a very dominant position some decades ago, today LO unions account for less than 50 per cent of unionised workers.

As of 2022, the Norwegian union density rate is 50 per cent, but with significant variations between industries. In the trade, hotel, and restaurant sectors, around 20 per cent of wage earners are unionised. In the public sector, this proportion is nearly 80 per cent. In the manufacturing and transportation sectors, the union membership rate is approximately 50 per cent . Young workers are less frequently unionised than older ones, and women are more often union members than men. The latter is largely due to the highly gender-segregated labour market, where many women work in public education, health, and social care.

In contrast to Denmark, Sweden, and Finland, the Norwegian unemployment insurance scheme is state-funded . This means that Norway does not follow the Ghent system, where unemployment funds are organised by trade unions through membership activities. This is often cited as an important explanation for why Norway has the lowest union density rate among the Nordic countries. Unlike many other countries, this density rate has been relatively stable over time. Over the years since 1950, between 50 and 58 per cent of employees have consistently been union members .
Membership numbers are crucial for both political and economic strength, and recruiting new members is an important task for the unions. This is mainly done by enrolling new employees at the workplace. Norwegian trade unions are funded through membership dues. Trade union members receive a tax deduction for union dues, and unions have worked to increase this tax benefit. The current government, led by the Labour Party, has doubled the deduction and for 2023 a total of NOK 7,700 (680 euro) is deductible.

Sector-level collective agreements, dominating the labour market, regulate a wide range of topics including wages, working time, leave, holiday and holiday pay, and procedural regulations, for instance for local wage negotiation. In the private sector, approximately 370-380 collective agreements are in force. Moreover, agreements are signed by a national union and a single employer (usually a "carbon copy" of the relevant industry agreement), and there are agreements for the public sector as well as other areas with a similar structure of agreements as the public sector, for example private health and care institutions.

Agreements are renegotiated every other year (main settlements). However, wage rates are also subject to bargaining in the second year of the agreement period (intermediate wage settlements). Strikes can only be used in connection with annual wage negotiations, or if an undertaking is not bound by a collective agreement. If an agreement is in place, both unions and employers are bound by a peace duty, and infringement of this rarely happens.

In cases where the parties cannot reach an agreement on their own, the National Mediator of Norway will attempt to facilitate an agreement. The National Mediator is an institution that holds high legitimacy and often helps provide a solution that both sides can accept. In addition, the partners occasionally request assistance from the government in the form of specific measures, legal amendments, or financial allocations to special initiatives. Examples are pension issues, funds for training and competence development and an extension of the scheme for temporary layoffs, which is important for both unions and employers in periods where enterprises need to downsize temporarily.

Norwegian wage formation is highly coordinated, signifying a commitment among social partners to ensuring that all sectors experience approximately the same level of wage increases over time. The annual bargaining rounds will always commence in the manufacturing industry, with the parties involved setting a norm for wage growth (the industry norm). This norm serves as a benchmark for subsequent bargaining rounds in other sectors. The rationale behind starting with manufacturing is its exposure to international competition. To prevent wage increases from jeopardising the competitiveness of businesses and, consequently, jobs, in this sector both unions and employers take into account global economic developments. According to economic theory, the sheltered sectors (public sector and other not exposed to international competition) should not surpass the outcomes of the manufacturing sector. This approach aims to prevent imbalances in the labour market and protect the competitiveness of export sectors.

Wage formation under the principles of the industry norm, supported by strong coordination, is a characteristic of the Nordic countries. Such a model for wage determination involves both the employee and employer sides promoting stable economic development, seen as advantageous for both sides of the labour market. However, this model does create tensions. For instance, female-dominated trade unions in the public sector argue that this type of wage formation makes it challenging to address disparities in pay between women and men, and that important occupational groups in health, care, and education are paid too little.

In Norway, where there is no state regulated minimum wage, wages are determined by collective or individual agreements. An estimate is that two thirds of Norwegian employees are covered by collective agreements. The coverage rate for private sector employees is around 50 per cent, whereas all public employees are covered .

In the Norwegian extension model, only some parts of the agreement - mainly the minimum wage level - are extended by legislation. This type of extension is disregarded when the coverage rate is calculated.

As mentioned, industrial conflicts occur mainly in relation to sectoral-level wage settlements. There is no tradition for wild cat strikes in Norway, and strikes are few but will often cover a great number of employees. On average, there are eight to ten industrial conflicts in Norway each year. If a union member has gone on strike, he or she cannot return to work until the parties have reached a new collective agreement and the strike is called off. Partial strikes or rotation strikes are not allowed, according to the legal framework. Lockouts sometimes occur, though mainly as an element of an ongoing strike/industrial dispute. In a European context, Norway finds itself in the top quarter of countries measured by lost working days relative to the size of the workforce. In the period 2010-2019, Norway had an average of 55 lost workdays per 1000 wage earners, while France had 121.

Social dialogue is, in its orientation and outcome, shaped by challenges in the economy, working life and other issues on the political agenda. For Norwegian labour organisations, social dialogue has for many decades been a crucial arena for influencing politics and, thereby, securing the interests of their members . Strong and centralised organisations on both the employee and employer side are perceived as important partners for the authorities. Tripartite cooperation occurs in established committees that meet regularly and in ad-hoc forums and meetings. In this section, we will provide a few examples of such cooperation and its outcomes.

The Government’s Contact Commission for the Wage Settlements is chaired by the Prime Minister and includes several cabinet ministers, the trade unions and employers’ confederations and organisations for agriculture and fishery. The remit of the commission is to facilitate the exchange of information between the partners prior to and during wage settlement rounds. The commission usually meets twice a year.

The Technical Calculation Committee for the Wage Settlements (TBU) consists of representatives of all trade unions and employers’ confederations, as well as representatives of Statistics Norway, the Ministry of Labour and Social Affairs, the Ministry of Finance and the Ministry of Local Government and Modernisation, which represents the government in its role as employer.
The committee’s remit is to provide the social partners and authorities with the best possible shared understanding of the economic situation. This includes wage and income developments over the preceding year, price developments and any changes in competitiveness. In this way, the partners can agree on the facts. The committee also provides an inflation forecast for the coming year.

The Council on Labour and Pension Policy was established by the Ministry of Labour and Social Affairs in 2004. Here, the cabinet minister and the social partners can discuss key challenges related to labour and pension policies. In recent years, the council has discussed how to follow up the social contract for an expansion of the number of apprenticeships, how to integrate asylum seekers into the labour market more rapidly, and the gig economy and its effects on wages and labour conditions. The council is also responsible for following up the Inclusive Working Life Agreement (IA Agreement). The council may appoint temporary or permanent working groups to review specific topics or long-term monitoring.

Universal government schemes play a greater role in Norway than in the other Nordic countries. The social partners have been active in the development of new welfare schemes and the outcomes are often a result of an interplay between negotiations and new legislation. The state pension and health insurance scheme (National Insurance Scheme, introduced in 1967) were partly based on earlier agreement-based schemes. A collective agreement-based early retirement scheme (AFP) was introduced as part of the wage settlements in 1988. Parental leave has also been increased over the years, from 18 weeks in 1977 (previously 12 weeks) to 49 weeks (or 59 weeks with 80% pay) in 2019. This is a statutory scheme, but the increase in the number of weeks was a result of a compromise on incomes policy.

Since the EU expansion in 2004, Norway has seen a significant increase in labour immigration, leading to challenges in certain sectors with high immigrant employment. To address low wage competition, collaborative efforts have been key in the tripartite system. The government has launched industry-specific programs in partnership with trade unions, employers' organisations, and regulatory agencies.

Norway also has a long tradition of bipartite collaboration between trade unions and employer organisations. This type of cooperation can occur as part of a tripartite initiative, or it may involve measures that only engage the trade union and employer sides. In many sectors, the social partners have established collaborative bodies with financial resources to implement projects at the industry or company level. For example, the parties can initiate projects and development work to ensure that employees and business management have the right skills during periods of introducing new technological solutions. The goal is to promote what is termed as "employee-driven innovation".

Another example is related to increasing full-time positions for women. The rate of labour market participation among Norwegian women is high, but a large proportion work part-time, which is considered a barrier to gender equality. Involuntary part-time work is seen as especially problematic. Both in hospitals and in the municipal sector, the bargaining parties have signed letters of intent to boost the number of full-time positions. Measures have been implemented at the workplace level and under guidelines and recommendations agreed upon at the central level.

The workplace level plays a crucial role in the Norwegian labour market model. Collective agreements between parties at the central level assume the election of shop stewards at the workplaces and lay down rights and duties of the company-level parties. Shop stewards also have important tasks in representing members in dealings with the employer and recruiting new members at the workplace. Union representatives at higher levels are recruited from company branches and are crucial to ensure that the labour movement has a strong democratic foundation .

The Norwegian bargaining system is based on a combination of central and company-level wage negotiations. Company-level bargaining is a significant task for shop stewards in most of the private sector, including manufacturing. The negotiations cover different topics, such as local wage increases, wage systems and working time arrangements, and take place under a peace obligation. The hierarchical structure of the Norwegian collective agreement system implies that company-level bargaining outcomes cannot violate the provisions included in agreements concluded at a higher level.

Co-determination between labour and management is particularly important when enterprises face major changes, such as restructuring and downsizing, but collaboration also occurs regarding competence development and productivity work. In a 2021 survey conducted on behalf of NHO, nine out of ten member undertakings agreed that they benefited from the collaboration between trade union representatives and management at the workplace level .

Shop stewards are crucial for trade unions that depend on them to maintain activity at the workplaces. Shop stewards cannot be replaced by centrally employed staff in the trade unions, as collective agreements presuppose that the company-level union representatives should be elected by and among the unionised employees. A concern for many trade unions is whether they can recruit enough shop stewards and whether they can facilitate conditions for them to remain in their roles over time.

Norwegian trade unions are part of an industrial relations system that balances conflicts and cooperation. Long-standing traditions of collaboration between unions and employers, as well as between the social partners and the authorities, do not mean that the fundamental conflict between labour and capital is irrelevant. Since Norwegian employment relations are largely regulated through nationwide collective agreements and legislation, unions seeking success in their work must utilise these provisions to ensure influence at both firm level and sector/national levels. Norwegian trade unions also depend on a well-functioning interaction between the national and firm levels. Regulations at national level ensure that company-level union representatives have a say at the workplace level. At the same time, the central-level trade unions rely on a well-developed network of local union representatives, both to safeguard the interests of the members and as a democratic foundation for the organisations.

Copyright image: AFP